The bitcoin mania has been resurrected and has led to the most spectacular comeback of the volatile cryptocurrency after it collapsed in 2022. Its price hit a record high of $69,200 on Tuesday.
At the beginning of this year, bitcoin was valued at $44,400. Its share price has climbed more than 300% since November 2022, a resurgence that very few predicted when it plunged to $20,000. Its previous record was set in November 2021, with a value of $68,790. At the time, the digital currency market was booming and several amateur investors poured their savings into this experimental industry.
The price has risen sharply since US regulators approved a series of bitcoin cash exchange-traded funds issued by Wall Street stalwarts, including Fidelity and BlackRock, the world’s largest asset manager.
This recovery has been driven by the enthusiasm generated by the new financial product linked to the digital currency. The new wave of capitalization has seen a 60% increase for this coin since the beginning of 2024 and has helped boost the flagship crypto token.
More than $7.5 billion has flowed into newly approved bitcoin ETFs since the first day of trading on Jan. 11, according to investment group CoinShares. These ETFs allow investors to make forays into cryptocurrencies in a way that involves less risk than before, analysts noted. “Investors are interested in the fact that bitcoin can be treated as a non-correlated asset, a circumstance that makes it very attractive for the diversification of the offer,” remarked the expert Joel Kruger to CBS. A bitcoin spot allows investors to gain direct exposure to bitcoin without owning it.
“The hype around ETFs goes far beyond any of the expectations,” Jad Comair, founder of the investment fund Melanion Capital, told the Financial Times. “It’s not just a spectacular jump in terms of price, it’s also a paradigm shift. Investors allocating bitcoin today are five to ten times more likely to be more confident than they were a couple of years ago,” he added.
Others wondered if some factor was being overlooked and if this could mean another blow, although they indicated that the territory is very different from 2022, when it was in a bubble. Despite the euphoria, the sector is still dealing with the consequences of that crisis, which was reflected publicly with the fall of Sam Bankman-Fried, founder of FTX, now in prison awaiting a long sentence.
